Today we are discussing on Penalty under Companies Act 2013. In this blog we will discuss cases where penalty can be imposed under companies act 2013 and amount of penalty also we will discuss who is liable for the penalty as per companies act 2013.
Penalty under Companies Act 2013
| Cases where penalty can be imposed under Companies Act 2013 | |||
| Section | Particulars | Who is liable | Amount of penalty |
| 4(5)(ii) | Furnishing wrong or incorrect information while applying for reservation of name | Person making application | UptoRs.1 lac |
| 11(2) | Commencing business without submitting declaration about having minimum share capital | Company | UptoRs.5,000/ – |
| 12(8) | Default in complying with provisions relating to intimation and display of registered office of company and display of name of company | Company and every officer who is in default | Rs.1,000/ – per day (M ax.1 lac) |
| 15(2) | Default in noting of alteration in M emorandum & Articles in every copy of memorandum and Articles | –do– | Rs.1,000/ – (for every copy of M emorandum or Articles) |
| 17(2) | Default in sending copies of memorandum & articles to a member within 7 days on payment of fees | –do– | Rs.1,000/ – per day of default or Rs.1 lac, whichever is less |
| 33(3) | Issuing application forms for securities without abridged prospectus, and not sending full prospectus on request | Company | Rs.50,000/ – for each default |
| 39(5) | Not refunding allotment money within 30 days if minimum subscription not received and not filing return of allotment within 30 days | Company and every officer who is in default | Rs.1,000/ – per day of default or Rs.1 lac, whichever is less |
| 42(10) | Default in provisions relating to private placement of securities | Company, promoters and directors | Upto amount involved in offer or invitation or Rs.2 crores, whichever is higher. |
| 60(2) | Default in provision relating to publication of authorized capital alongwith subscribed and paid up capital | Company | Rs.10,000/ – for each default |
| Officer in default | Rs.5,000/ – for each default | ||
| 91(2) | Default in provision relating to closure of register of members and debenture holders | Company and every officer who is in default | Rs.5,000/ – per day (M ax.1 lac) during which register is closed. |
| 94(4) | Default in keeping register of members and copies of annual returns at registered office and allowing its inspection | Company and every officer who is in default | Rs.1,000/ – per day (M ax. Rs.1 lac) for each default |
| 111(5) | Default in circulation of members resolution | Company and every officer who is in default | Rs.25,000/ – |
| 118(11) | Default in provisions relating to maintenance | Company | Rs.25,000/ – |
| of minutes of general meetings and Board meetings | Officer who is in default | Rs.5,000/ – | |
| 119(3) | Default in allowing inspection of minutes of general meeting or resolution passed by postal ballot | Company | Rs.25,000/ – |
| Officer who is in default | Rs.5,000/ – | ||
| 136(3) | Default in sending copies of audited financial statement to members and its inspection | Company | Rs.25,000/ – |
| Officer who is in default | Rs.5,000/ – | ||
| 173(4) | Default in giving required notice of Board meeting | Every person whose duty is | Rs.25,000/ – |
| 189(6) | Default in keeping register of contracts or arrangements in which directors are interested and disclosure by directors of their interest | Every director | Rs.25,000/ – |
| 190(3) | Default in keeping contract of service with M D and WTD and allowing its inspection | Company | Rs.25,000/ – for each default |
| Officer who is in default | Rs.5,000/ – for each default | ||
| 352(8)(a) | Company Liquidator retaining money without depositing it in Company Liquidation Dividend and Undistributed Assets Account | Liquidator | Such amount as may be determined by ROC. |
| Note: | |||
| Concept of levy of penalties by adjudicating officers has been introduced for the first t ime in company | |||
| law in Companies Act 2013. As per Companies (Adjudication of Penalties) Rules 2014 adjudicating | |||
| officers (not below the rank of Registrar) can levy penalty after issuing show cause notice and hearing in person, if required. Appeal against such order can be f iled with the Regional Director. | |||
| It may be noted that penalty is different from fine. Only Special Court can take cognizance of offence under the Act and can order for fine/ imprisonment. |
